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No Money? No Problem! Venezuelan Bonds Rally in Act of Faith

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Despite reassurances from the Venezuelan government and state-run oil company that checks for past-due bond payments are in the mail, few investors have actually seen the money yet.

No matter. Bonds are rising, paring some of the selloff sparked by President Nicolas Maduro’s announcement Nov. 2 that he would seek to renegotiate the nation’s billions of dollars in overseas debt obligations. Investors have little choice but to take his word for it and assume the procedural delays in the payment chain, which have worsened since U.S. sanctions in late August, will eventually be worked out.